Obama: New Law Should Require 'Plain Vanilla' Credit Cards
President Obama, in remarks just released from the White House following his summit with top credit card issuers, laid out his four principles for reform of the credit card industry, pushing for simplification and an end to high fees.
One of the principles involves Congress quickly passing a law that requires credit card companies to issue what sounds like a Credit Card for Dummies.
"Every credit card issuer has to issue a plain vanilla easy-to-understand, simplest possible credit card that would be the default credit card that the average user can feel comfortable with," the president said.
His four proposals:
-- "Strong and reliable consumer protections," Obama said, meaning and end to the "any time, any reason rate-hikes" and "late-fee traps."
-- "All fees have to be written in plain language and plain sight," he said. "No more fine print." Knowing how much fine print there is on an average credit card contract/bill, one can anticipate 100-page credit card bills, if issuers have to increase the size of the type.
-- Consumers have to be able to comparison-shop among credit cards, meaning each issuer must plainly list their terms online. Here's a site that does that already: CreditCardGuide.com. This is where Obama proposed his "plain vanilla" credit card requirement.
-- More effective oversight and enforcement of laws governing the credit card industry.
Obama said the credit card industry has been "out of balance;" presumably tipped toward the issuers, and the government needs to "create a new equilibrium." He said credit card companies should be able to earn a "reasonable" profit. Which, of course, is a loaded word.
Far be it from The Ticker to suggest that people a) read their credit card agreements b) don't run up massive debts to trigger higher interest rates and c) otherwise live within their means.
Here are the credit card company executives who met with Obama today:
-- David Bohne, president, USAA Savings Bank, USAA.
-- Patrick Burke, senior vice president and chief operations officer, HSBC card and retail services.
-- Paul Galant, chief executive, N.A. Cards, Citi.
-- Pamela Joseph, vice chairman, payments, US Bancorp.
-- Christopher McWilton, president, U.S. markets, MasterCard Worldwide.
-- David Nelms, chief executive, Discover Financial Services.
-- Kevin Rhein, division president, Wells Fargo card services and consumer lending, Wells Fargo and Company.
-- Ryan Schneider, president of cards, Capital One Financial Corp.
-- Lawrence Sharnak, executive vice president and general manager, consumer cards, American Express.
-- William Sheedy, global head of strategy, VISA U.S.A., Inc.
-- Gordon Smith, chief executive, Chase Card services, J.P. Morgan Chase & Co.
-- Richard Struthers, president, global card services, Bank of America.
-- Lloyd Wirshba, chief executive, Barclaycard US.
-- Edward L. Yingling, American Bankers Association.
April 23, 2009; 2:44 PM ET
Categories: The Ticker | Tags: Bank of America, Citi, Obama, USAA, Wells Fargo, credit cards
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